Pension risk transfer (PRT) costs edged higher in March, but not enough to disrupt what remains a favorable environment for plan sponsors. According to the latest data from Milliman, its Pension Buyout Index (MPBI) rose to 100.9% of a plan’s accounting liabilities—up from 100.5% the previous month.
In plain terms, companies looking to offload retiree pension obligations to insurers are now paying just slightly above the value of those liabilities, keeping buyouts within striking distance of “par.”
A Modest Increase—But Still a Strong Market
The March uptick reflects a 40-basis-point increase in the estimated cost of transferring pension risk through a competitive insurer bidding process. Meanwhile, average annuity purchase costs across insurers rose to 103.9%, up from 103.6%.
That spread highlights a key dynamic in today’s PRT market: competition matters. According to Milliman, plan sponsors can still save roughly 3% by running a competitive bidding process rather than accepting average pricing.
The index itself benchmarks annuity purchase rates against the FTSE Above Median AA Curve, offering a snapshot of how insurer pricing compares to pension liabilities.
PRT Market Still Running Hot
Despite the slight cost increase, broader momentum in the PRT market remains strong. Industry data from LIMRA shows total pension risk transfer volume exceeded $48 billion in 2025—marking the fourth consecutive year above $45 billion.
That sustained activity underscores continued appetite from both plan sponsors looking to de-risk and insurers willing to take on long-term liabilities.
“Although annuity purchase costs increased this month, the competitive MPBI is around 100%, so plan sponsors are still seeing favorable results,” said Jake Pringle, Milliman principal and MPBI co-author.
What’s Driving the Trend
Several factors continue to shape PRT pricing:
- Interest rate movements influencing liability valuations
- Strong insurer competition in large-plan buyouts
- Ongoing corporate efforts to reduce balance sheet risk
- Improved funding levels for many pension plans
Even with month-to-month fluctuations, the broader trend suggests that many organizations still see now as an opportune time to exit pension obligations.
The Bigger Picture
For HR, finance, and benefits leaders, PRT strategies are becoming a central lever in long-term workforce and financial planning. Offloading pension risk can stabilize balance sheets—but timing and pricing remain critical.
Milliman’s latest data suggests that while costs may be inching upward, the window for near-par buyouts hasn’t closed.
The bigger question is how long that window stays open.
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